December 9, 2022/FBNQuest
The National Bureau of Statistics (NBS) latest report on foreign trade in goods shows that the total value of Nigeria’s merchandise trade in Q3 ‘22 increased by 11% y/y to NGN11.6trn. Relative to the last quarter, the total value of trade was down 10% q/q, its lowest value since Q3 ’21. The sharp decline was primarily due to a drop in the value of export trade which decreased by -20% q/q to NGN5.9trn. The NBS series is compiled from data provided by the Nigerian Customs Service (NCS) and other government agencies.
Compared with Q3 ’21, the growth in export value was 16% y/y and at NGN5.9trn, while the total value of imports increased by 6% y/y to NGN5.7trn.
The net result was a trade surplus of NGN269.3bn, which represents an 86% decline compared with the NGN1.97trn surplus it recorded in the previous quarter. The trade surplus in Q3 ’22 is the third in a row.
Imports of premium motor spirit (PMS) in Q3 amounted to NGN1.2trn, almost double the NGN648.8bn value for Q3 ’22. It accounted for c.21% of total imports.
The increase in the import value of premium motor spirit can be attributed to the rapid rise in crude oil prices brought on by the conflict between Russia and Ukraine as well as the depreciation of the naira.
As expected, crude oil accounted for the largest share (79%) of total exports. The value of crude oil exports increased by 16% y/y but declined by -21% q/q to c.NGN4.7trn in Q3 ’22.
Notably, non-oil exports decreased significantly by -35% q/q to c.NGN438bn and accounted for only 21% of Nigeria’s total export trade in Q3 ‘22, underscoring the difficulties the federal government faces in diversifying the nation’s economic base.
The major contributory factor behind the weak export earnings was the decline in Nigeria’s oil production output during the quarter.
According to the recently released data from the national account, Nigeria’s average crude oil production declined to 1.20 million barrels per day (mbps), compared with 1.43mbpd and 1.57mbpd in Q2 ’22 and Q3 ’21 respectively.
In aggregate terms, Nigeria recorded a total trade balance of c.NGN37trn over 9M ’21, comprising import and export trades of NGN17trn and NGN20trn respectively, implying a net surplus of around NGN3trn.
